ONE OF THE STATED purposes of Ronald Reagan's cuts in federal domestic spending is to return responsibility for many functions of government to the states and localities. An unstated corollary of this is that the burden of raising money for these purposes will devolve upon states and localities as well. The administration has had some success in paring federal spending--although not nearly so much success as it has had, in dollar terms, in cutting federal revenues. Now it begins to appear, from information filtering back from the 50 state capitals, that the administration has had some corresponding success in increasing state and local spending.
Certainly it is true that state taxes have risen in the Reagan years. Only five states--oil-rich Texas and Louisiana, mineral-rich Wyoming, and Illinois and Hawaii--have avoided raising some major form of taxation--income, sales, corporate, gas, tobacco or alcohol--in the years 1981, 1982 and 1983. So far in 1983, seven states have raised personal income taxes, 10 have raised their sales tax, five have raised corporate income taxes, 16 have raised gasoline taxes, and seven have raised tobacco or alcohol taxes. The states, unlike Mr. Reagan's federal government, are obliged to balance their budgets, and by the beginning of this year it was apparent that they could not do so without raising taxes.
This doesn't mean that states haven't cut expenditures; they have, and it's often been a painful process. But most states have decided that they don't want spending cut as drastically as it would have to be in order to avoid all tax increases. Even states as hard hit by the recession as Michigan and Ohio have decided to raise their income tax rates, by hefty margins, in order to maintain what they would have regarded a few years ago as rather minimal levels of services. Those particular tax rises are being challenged by threats of recall and referendum, but the two governors who secured them were elected last fall over opponents who promised no tax increases, and there is every reason to believe that the tax cuts represent the considered judgment of most voters in those states.
It is true that on balance almost everywhere the ordinary family's tax burden has been decreased in the Reagan years: federal taxes have been cut by more dollars than state taxes have been increased. But that assumes that family income has remained the same, which has not been the case in many instances. Supply-siders might argue that one reason the president's tax cuts did not produce the promised surge in the national economy is that they were counterbalanced to some extent by rises in state taxes. But those rises were mandated in almost every case not by any desire to expand government, but to maintain current or somewhat lowered levels of services. Someone has to pay for these services, and if they are to be financed by the state rather than the federal government, that someone is going to have to be the taxpayer.